Home/Business/Inside the dramatic decision by corporate giants to rebuke Trump

WASHINGTON, DC - FEBRUARY 03: JPMorgan Chase CEO Jamie Dimon attends a policy forum with U.S. President Donald Trump in the State Dining Room at the White House February 3, 2017 in Washington, DC. Leaders from the automotive and manufacturing industries, the financial and retail services and other powerful global businesses were invited to the meeting with Trump, his advisors and family. (Photo by Chip Somodevilla/Getty Images)

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After President Donald Trump’s incendiary comments last weekend about the violence in Charlottesville, the three female CEOs on his Strategic and Policy Forum helped get the ball rolling about appropriate responses.

The question, as they saw it, was whether it was better to remain on the Trump forum, with the ability to influence the White House? Or did it make more sense to back away to show disdain for the president’s seeming support of white nationalists?

It was several days between Trump’s initial remarks and when the full forum ultimately made a decision. By Tuesday the CEOs of Pepsi, IBM and GM – Indra Nooyi, Ginni Rometty and Mary Barra, respectively – were involved in a process that ultimately dissolved the high-profile panel of top chief executives and launched an embarrassing, public rebuke of Trump for his comments that seemed to defend and justify some of the actions taken over the weekend by a group of neo-Nazis and white nationalists.

Trump had started the firestorm with his comment Saturday that “many sides” were to blame for the violence in Charlottesville, Virginia. One woman was killed and other marchers were injured when a member of the white nationalist group rammed them with his car.

Pepsi CEO Nooyi joined the conference call with the two other CEOs and Boston Consulting Group CEO Rich Lesser to see what others thought, said a source from one of the companies that had been part of the forum. As the head of a consumer products company, she was particularly aware of the building public outcry.

The White House committee, formed with much fanfare as a new partnership between business and government, was getting a lot of heat. The CEOs began to feel like they and their companies had become targets just because of their association with the White House. “If you were a customer-facing business, you definitely were feeling the heat,” said a source familiar with the panel’s deliberations.

On Monday, Merck CEO Kenneth Frazier stepped down from the president’s manufacturing council. Trump quickly responded by criticizing Frazier and Merck on Twitter. But other CEOs also quit the manufacturing panel, including Intel CEO Brian Krzanich.

Meanwhile, people took to social media to pressure Pepsi, Campbell Soup and other companies to quit Trump’s panels.

Steve Schwarzman, CEO of Blackstone, who was tasked by Trump to form the Strategic and Policy Forum, was still hoping to keep the panel together, sources said. The panel’s mission was to work on ways to make American business more competitive, boost the economy and create more American jobs. Former General Electric CEO Jack Welch was also in favor of keeping the group together.

Trump on Monday toned down his comments and took steps to smooth things over with strong remarks targeting groups such as the Ku Klux Klan and neo-Nazis.

At that point, the panel might have survived.

“Things seemed to be cooling off after the Monday remarks,” one source said. JPMorgan CEO Jamie Dimon was on the fence, the source added.

But then Trump repeated his initial remarks in an off-the-cuff press conference Tuesday that was supposed to be about the very business of business — his infrastructure plans. Trump’s advisers were visibly shocked and so was the business community.

“They were appalled by what has happened since Charlottesville and yesterday was the tripwire,” said one member of the panel. Besides Trump’s comments about who was to blame in Charlottesville, Trump also criticized Wal-Mart CEO Doug McMillon for speaking out about Trump’s response.

McMillon had told employees in a memo Monday that Trump “missed a critical opportunity to help bring the country together” with his comments. But the CEO chose to remain on the president’s forum. Trump lashed out at McMillon on Tuesday and accused him of being “politicial.”

“There was also a real chill…when [Trump] was critical of Doug McMillon at Wal-Mart,” said one source.

Meanwhile, the four CEOs on the Tuesday evening conference wanted Schwarzman to hold a call, said the source from a company that had been part of the forum.

Then in an email he sent just before 3 a.m. ET on Wednesday, Schwarzman, called on all of the group’s members to convene via conference call at 11:30 a.m.

In a call that went past noon, each panel member was called upon to speak, in alphabetical order. They talked about the events over the past few days, their condemnation of Trump’s comments, and the concerns expressed by their employees, customers and the public.

Barra said it was time to “sunset” the panel, a source said.

Likewise, Dimon made an emotional case for ending the forum, according to a source. The JPMorgan CEO later said in a statement that he disagreed with Trump’s reaction to the events in Charlottesville. “Racism, intolerance and violence are always wrong,” he wrote to his employees.

BlackRock CEO Larry Fink said on the call that he would resign if the group didn’t decide to dissolve itself.

“I would urge that the forum disband itself and if it doesn’t disband, I’m stepping down,” he said, according to one source.

In a later statement, Fink said he had been telling other forum CEOs whose companies are clients of BlackRock, as well as Schwarzman, during the previous 24 hours that he was ready to resign.

“The thinking was it was important to do it as a group, as a panel, not as individuals because it would have more significant impact. It makes a central point that it’s not going to go forward. It’s done,” said a source who was a member of the panel.

The decision was made and the group awaited its statement both condemning the comments and announcing that it was dissolving itself. But then Trump fired off a tweet which said he was ending both the manufacturing council and the Strategy and Policy Forum, “rather than putting pressure on the business people” on the committees.

The forum’s statement later Wednesday added that the president, as well as the forum, decided to end the panel. One source said Schwarzman had been in contact with Trump.

“It’s a shame; it did some positive things. One of the most important [things] was to stop the currency war with China,” said the source who was a member of the panel. But on Wednesday, there was no debate about whether the panel should continue.

“There was such a firestorm. You don’t know what’s coming next or what he’s going to say or do next,” said the member. “It’s striking when the president loses the confidence of America’s CEOs.”

Correction and clarification: This story has also been updated to clarify the timeline of when CEOs discussed their concerns about Trump and corrects that Pepsico’s CEO did not speak to other CEOs until Tuesday. The story has also been updated to reflect that Trump said Saturday that “many sides” were responsible for violence in Charlottesville.